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Friday 29 August 2014

Upsurge in motoring sales expected to drive economy - new report

Eddie Cunningham

Published 15/07/2014 | 11:23

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Motoring is a key driver of the recovery, according to economist Jim Power
Motoring is a key driver of the recovery, according to economist Jim Power

We will buy at least 5,000 more new cars this year than the most optimistic earlier forecasts, according to a new report today.

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But it warns Finance Minister Michael Noonan that he could shatter the ‘fragile’ recovery in sales and jobs with any new tax measures in the Budget.

The report, by economist Jim Power, says motoring is a key driver of the recovery and predicts we will buy 95,000 new cars in 2014. That is at least 5,000 more than had previously been estimated earlier in the year.

 “After a horrendous period, sales and activity levels are rebounding at quite a vigorous pace,” he says.

We have already bought more cars up to July 9 than in all of last year.

And the Exchequer is benefitting with €629.3m in VRT and VAT collected from new (€541.8m) and used (€87.6m) car sales. That is an increase of 22.7pc on the first half of 2013.

Consumer confidence, greater availability of credit and people spending more of their disposable income are major factors behind the increased buying.

Dealers have reported a 33.6pc increase in the number of enquiries while orders rose by 52.8pc in the first half of the year.

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